"Too many Americans remain unemployed, inflation remains below our longer-run objective and not all of the necessary financial reform initiatives have been completed"
- Janet Yellen, Fed Chair
Federal Reserve Head Janet Yellen reiterated her pledge to keep interest rates low, but added that in case the labour market continues strengthening there might be earlier-than-planned rate hikes. Yellen also said that economic recovery remained incomplete, expressing disappointment in housing market as mortgage rates have edged higher, and stressing that the Fed's help was necessary. In addition, the Fed Chairwoman noted that there were signs of production and spending improvement in the second quarter. Moreover, she played down concerns over health of the financial markets despite acknowledging signs of bubbles in some areas, including stocks of social media and technology companies. Yellen generally dismissed calls that the U.S. central bank has caused dangers.
Meanwhile, U.S. retail sales rose less than initially was expected, adding to evidence that consumers remain cautious despite sturdy job gains this year. Retail sales inched higher 0.2% in June, the Commerce Department said Tuesday, holding back by a sharp decline at building and garden supply stores, as well as at restaurants and automobile dealers. Economists, however, expected retail sales, which account for a third of consumer spending, to rise 0.6% following the May's gain of 0.3%.
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